Three computer scientists who dropped out of university are in line for a
multi-million dollar payday after the company they founded was snapped up by
Cisco for $1.2bn (£754m).

Sanjit Biswas, John Bicket and Hans Robertson will become instant millionaires after Cisco swooped on Meraki, a company that emerged in 2006 from the PhD programme the three were pursuing at the Massachusetts Institute of Technology (MIT).

Meraki designs and builds devices that allow companies and organisations to create wireless networks and then manage them over the web, reducing the need for IT staff.

The Silicon Valley start-up, whose customers range from the English public school Wellington College to fast-food chain Burger King, has enjoyed explosive growth as organisations and companies face increasing pressure to provide wireless access to the internet.

“Over time, we expect Cisco will be able to expand Meraki’s technologies across the company’s portfolio,” said Brian White, a technology analyst at Topeka Capital.

Cisco said that it had been in exclusive talks since September with Meraki, whose founders had been considering a flotation and initially turned down the takeover approach.

As the deal was announced, the price being paid for Meraki raised questions among some analysts, but Cisco said its greater scale and financial firepower would be able to drive the expansion of Meraki’s technology inside the US and beyond. Besides an office in San Francisco, Meraki has one in Mexico City and substantial operations in London.

Cisco insisted on Monday that the deal included a retention package that will keep Meraki’s co-founders at Cisco once the deal is completed early next year.

“We are making sure we want to preserve and pollinate the culture (at Meraki) into Cisco,” said Sujai Hujela, an executive at Cisco. “They are smart kids from MIT and see it as their chance to scale the business.”

Cisco and Meraki declined to give details about the latter’s revenue, but Meraki said last month that it grew 150pc in the third quarter as it added 3,000 customers.

The deal will also provide a handsome windfall for Californian venture capital firm Sequoia Capital and Google, two of Meraki’s early investors. Sequoia was introduced to Meraki by Rajeev Motwani, the Stanford University professor who taught Google co-founders Larry Page and Sergy Brin.

“When we started out six years ago, we were three guys at MIT wondering where our bootstrapped venture would take us over the next few years,” Mr Biswas said. He and his co-founders are still officially on indefinite leave from their PhDs at MIT.